Coinbase reported Q2 earnings. They lost $1.1 billion in the quarter and revenue declined 64%

Coinbase’s revenue declined nearly 64% as investors exited the crypto market after last year’s dramatic run. Retail transaction revenue came in at $616.2 million, down 66% and below the $667.1 million consensus among analysts polled by StreetAccount.

Coinbase reported a $1.1 billion net loss, compared with $1.59 billion in net income in the same quarter last year, according to a letter to shareholders.

“Q2 was a test of durability for crypto companies and a complex quarter overall,” the company said in the letter. “Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management program.”

The company said it had 9 million monthly transacting users during the period, down from 9.2 million in the first quarter but more than the 8.7 million StreetAccount consensus. Macroeconomic and cryptocurrency credit resulted in lower trading volume during the quarter, the company said. Coinbase’s own cryptocurrency assets at the end of June were worth $428 million, down from about $1 billion at the end of March.

It was a challenging quarter for Coinbase from an operational perspective.

Coinbase’s stock tumbled 75% during the second quarter, while the price of Bitcoin plunged by about 59%.

Coinbase updated its outlook for the full year. It now expects 7 million to 9 million monthly transacting users, down from a range of 5 million to 15 million three months ago. Management said it expects average transaction revenue per user in the low $20 range, rather than pre-2021 levels.

The company said has set a plan for marketing spending for the second half of the year that’s in keeping with its efforts to manage expenses, including “optimization of paid media.” And it reduced its forecast for technology, development and general and administrative expenses to $4.0 billion to $4.25 billion from the $4.25 billion to $5.25 billion range a quarter ago.

Coinbase shares declined almost 11% in Tuesday’s regular trading session.

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Source: https://www.cnbc.com/2022/08/09/coinbase-coin-earnings-q2-2022.html